Required: Part A (8 marks)- Create a Static Budget Report Variance Analysis, indicating whether variances are favorable (F) or unfavorable (U). All variance amounts should be shown as positive numbers. Static Budget Amount Actual Results Sales in Units 4,032 5,210 Variance Favorable or Amount Unfavorable 1,178 Favorable 121,200 Favorable Sales $ 504,000 $ 625,200 Less: Variable Costs: Cost of Goods Sold 219,000 215,000 4,000 Favorable 22,008 Unfavorable Sales Commissions 65,520 87,528 284,520 302,528 Total Variable Costs Contribution Margin Less: Fixed Costs: 18,008 Unfavorable 103,192 Favorable 219,480 322,672 23,000 25,000 Advertising Property Taxes 9,000 10,000 Rent 54,000 52,000 2,000 Unfavorable 1,000 Unfavorable 2,000 Favorable 11,000 Favorable 10,000 Favorable 113,192 Favorable 112,000 Salaries & Wages Total Fixed Costs 101,000 188,000 198.000 134,672 21.480 Net Operating Income Discuss the variances you've identified in the static budget report (e. what are potential causes of the variances?) What is the weakness of using a static budget report to evaluate performance? (2 marks) B Required: Part B (12 marks). The owners can see that the company sold a different amount of units than budgeted. They have asked you to create a flexible budget report. Flexible Budget Amount Actual Variance Results Amount 5,210 Favorable (F) or Unfavorable (U) Sales in Units Sales 625,200 Less: Variable Costs: 215.000 87,528 302,528 322,672 Cost of Goods Sold Sales Commissions Total Variable Costs Contribution Margin Less: Fixed Costs: Advertising Property Taxes 3 Rent e Salaries & Wages Total Fixed Costs Net Operating Income 2 25.000 10,000 52,000 101,000 188.000 134,672 Management was pleased on the results based on the static budget report. Should they be pleased? What w? What are your recommendations to management hacer on the flexible